The Pros and Cons of Employee Background Checks

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The Pros and Cons of Employee Background Checks

March 5, 2015 | Jennifer Goodwyn

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In many industries, it is standard procedure to run background checks on prospective employees before officially offering them a position. While utilizing background checks in the hiring process can protect the company from bad publicity, safeguard the companies' assets, and make current employees feel safe and secure in their work environment, employee background checks come with their own set of disadvantages. If you're considering incorporating background checks into your hiring process, here are some things to take into consideration.

Pro #1: Workplace Safety

Employment experts generally agree that successful criminal background checks reduce the instances of violence in the workplace. In any workplace, even virtual office environments, it is the employers' responsibility to create a safe and healthy working environment for all employees.  According to a survey conducted by the U.S Department of Justice, 1.75 million work days and $55 million are lost each year due to workplace violence – performing a simple background check prior to hiring new employees could save your small business valuable time and money.

Con #1: Time and Expense

Unfortunately, background checks can be quite expensive, especially for small business owners and entrepreneurs. A background check can cost anywhere from $20 for a basic background check to $300+ for employees at an executive level. For an employee who must interview several candidates for one open position, the costs can add up rather quickly. Additionally, it takes time for a background check to be completed – in some cases, by the time the background check has been completed and the employer is ready to hire a qualified candidate enough time has passed for the candidate to have interviewed for and accepted another position.

Pro #2: Avoid Bad Hires

According to surveys, the replacement cost of a bad hire is 1 to 5 times the salary in question. Before performing a background check, consider the direct and indirect cost of recruiting, hiring, and training, in addition to wasted wages, benefits, and virtual office resources. Verifying the claims of a candidate can help you make the right choice, the first time, saving you valuable time and money. A large number of applicants make false claims; whether you're verifying criminal history, job history, or education, a background check can keep you from hiring someone who lied on their resume.

Con #2: Unfair Bias

Unfortunately, the results of a background check can cause an unfair bias in the hiring process. Background checks can disqualify criminal offenders who committed a crime, learned from their mistakes, and have since developed into a responsible, qualified, and experienced candidate for the position. Just because a potential employee received a DUI at the age of 21 doesn't automatically mean they're unfit for the position. If you're going to conduct an employee background check, come up with specific grounds for disqualification before you review the report.

Types of Background Checks

The types of checks a potential employee could conduct include a criminal background check, references at prior jobs, and verification of an applicant's education. Before searching for such information, the employer should fully disclose the nature of the search in the form of a signed legal release. Also, be sure to check the laws in your state before performing a background check – at least eighteen states have proposed or enacted legislation limiting or forbidding background checks. 

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